AI delay in Portugal

Artificial intelligence is one of the most appealing markets to explore and invest in. It is essential that countries think about how they will welcome and take advantage of this new technology, so it can have the best impact possible in the economy.

Even thought, it is obvious that it could lead to the extinction of thousands of jobs (it is estimated that up 481.000 in 10 years in Portugal), is necessary to understand that is something essential for the growth and progress of the economy, and also, contrary to what many believe, a great opportunity to create new jobs, it is estimated that 401.000 working spots may appear with this development also in 10 years. 

Fortunately, Portugal was aware of this being one of the first countries in the European Union to see this chance and build a strategy to guarantee the efficient development of this market in the end of 2018. A program that in a short version was focusing on the qualification in this area, with courses to prepare a “new type” of working force, also on the investigation with state support for research programs, and fiscal benefits for small and medium size companies that were in the field of technology, in the 2018 State’s Budget. 

However, despite the increase, Portugal continues to be one of the countries that invest least in R&D (Research and Development), in comparation with the other countries of the European Union. With countries like Estonia (1.9%) or Slovenia (1.8%) investing more percentage of the GDP than Portugal (1.7%). And even it if seems not, given the difficulty of evaluating the level of investment of the countries in AI, the R&D is one of the measures that is usually predominant when evaluating which countries are trying to be steps ahead in this “race” to AI. 

Despite the strategy implanted, and in addition to already investing least than is needed in R&D, Portugal continues to have less skilled labor than expected and few companies using or investing in AI, with only 8% of Portuguese small and medium size companies using AI technologies in 2023. This is a very negative sine when we compare and take into account countries that invest more than double.

Certainly, this could end up to be harmful for Portugal’s economy. AI is becoming an essential part of various industries. Consequently, not investing in AI could led to a serious delay in terms of competitiveness to other countries. AI is creator of countless growth opportunities and certainly has the potential to drive economic growth in the future. In fact, a study from AWS (Amazon WEB Services) esteem that if more favorable conditions for the implementation of AI are created, in Portugal, the economic impact would be around 61 billion euros in GVA. This is easy to believe when 70% of the companies that adopt AI technologies increased their revenues and productivity. So, it’s clear for everyone that Portuguese political institutions must see this and seize this opportunity until it’s too late.

In fact, all this information is essential to show the difficulty of Portugal on welcome this technology. Even with this information we’re also faced again with another state budget that invests little to nothing more than before in R&D, makes little to no effort to embrace AI, only implementing measures related to artificial intelligence cybersecurity and nothing to promote its growth in the economy.

In general terms, it’s necessary to reinforce the plan already made in 2018 providing conditions for the innovation and implementation of AI companies in Portugal. As with everything the risk is noticeable but is necessary to understand that is an opportunity to be at the forefront of AI innovation and development. As the global landscape continues to evolve, embracing AI is no longer an option but a necessity for Portugal to remain competitive and drive sustainable economic growth.